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Tourist tax loss not as bad as thought |
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Wednesday, 19 September 2007 |
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By Jon Klusmire
Register Staff 9-18-2007
For a tourist-based economy, some factors made the economic outlook for tourism appear a little dicey, if not downright daunting in the past year.
Gas prices hovered around and often well above the $3-a-gallon mark; the winter snowfall was essentially non-existent for backcountry winter sports fans and miserly at best for visitors to Mammoth Mountain Ski Area; there was no wildflower season to speak of; and Inyo County’s chambers of commerce and promotional groups only got about 60 percent of their usual funding to spend on enticing vitiators to the area and then entertaining them when they got here.
Despite those “challenges,” as marketing types like to call them, some financial data and reports appear to show that Inyo County held its own when it came to attracting tourists, or at least didn’t see a huge drop in the number of visitors to the area. (The county data is from the recently concluded 2006-07 fiscal year, which runs from July 1 to June 30.)
Sales tax collections and Transient Occupancy Tax (bed tax) totals both came in higher than budgeted and expected, which was a bit of a pleasant surprise given the less-than-rosy outlook for tourism. Also, revenuefrom the 10 campgrounds operated by the county also exceeded initial estimates.
While those figures seem to show at least a stable flow of tourists still finding their way to Inyo County, the county’s budget-makers are not banking on a repeat performance in 2007-08, because several unique factors contributed to last year’s sales and bed tax collections.
In the City of Bishop, bed tax collections are on schedule to hit or exceed the 2 percent increase planned for in the budget, said City Administrator Rick Pucci.
However, Pucci warned about reading too much into bed tax receipts or making a direct correlation between the bed tax and the actual number of visitors who might be bedding down in local hotels.
The city and county bed taxes are calculated as a percentage of the total cost of the room. Thus, when room rates go up, bed tax collections go up automatically, he noted.
“Our bed tax seems to remain stable,” probably because the price of motel rooms keeps going up a little bit each year, Pucci said. Then there are the special events in Bishop, such as Mule Days, when some motel rooms go for $200 a night. Put the city’s 12 percent bed tax on that motel bill and a visitor will pay an additional $24 a night in bed tax.
Pucci said that when it comes to making a general assumption about how well the area did attracting tourists, “it’s hard to get a handle on it” using tax revenue statistics.
Each business, especially in Bishop, can be affected differently by more or fewer tourists, or the general number of travelers going through town, he said. So it’s hard to generalize about the impact of the low snow year, for example, since some businesses are more reliant on traveling skiers and snowboarders than others.
Sales tax revenue represents more of a snapshot about the general state of the local economy, Pucci noted, since everyone, visitors and residents alike, pays a sales tax, while only those staying in motel or hotel rooms pay the bed tax.
Using sales tax as a measurement shows that Inyo County’s economy didn’t shrink last year, but it didn’t grow much, either.
The county sales tax (which goes to the General Fund) and the Transaction and Use Tax (which funds Solid Waste) went up about $65,000 in 2006-07, and total about $2 million.
Turning back to tourism, the campground revenue the county collected could provide a better gauge to measure how many people are visiting than the sales tax or the bed tax, Pucci said. The camping fees haven’t gone up, and there is a solid history of collections for purposes of comparison.
In 2005-06, the county collected about $229,000 in campground fees (those fees include direct payments from campers and payments by concessionaires hired to run several county campgrounds). This past year, 2006-07, campground fee income went up about $24,000, to $253,000.
While the county typically budgets the next year’s income at the same level as how much was actually collected during the previous year, that’s not the case with campground fees.
For 2007-08, the county is only expecting its campgrounds to generate about $242,000.
The county is also planning to take in less Transient Occupancy Tax this year than last.
In part, the rationale for cranking back the income estimates from the bed tax and campgrounds is based on the remaining uncertainty created by high gas prices, an unpredictable snow season and the potential state-wide economic slowdown driven by the collapse of the housing bubble, County Administrator Ron Juliff noted earlier this year when presenting the income projections.
The big jump in county bed tax collections for 2007-08 requires some interpretation. First off, the bed tax rate went from 9 to 12 percent on Jan. 1, 2007.
That drove collections to $1.9 million for the fiscal year, compared to $1.6 million for 2006-07. That $1.9 million figure, though, was more than the county was anticipating, even with the rate hike.
The continued uncertainty about the negative economic factors that could affect tourism was reflected in the estimates for the 2007-08 bed tax income. The county is only counting on taking in $1.7 million in bed tax this fiscal year.
Besides general concern about tourism, the county also acknowledged that last year was a huge year for the movie business in Inyo County, with a steady stream of commercials, music videos and low-budget television shows and movies.
The big boost came when the major studio feature “Iron Man” brought a cast and crew of 500 to the Lone Pine and Death Valley areas for several weeks of filming. Then there were several additional weeks of crews scouting and doing pre- and post-production work for the movie. Inyo County Film Commissioner Chris Langley said landing the big film pumped millions directly into the local economy, and filled up motels from Death Valley to Bishop for several weeks.
Unfortunately, that type of large-scale, big-budget movie production has been fairly rare in recent years, and the county shouldn’t expect to get that type of huge movie shoot every year, Langley noted.
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Last Updated ( Friday, 26 October 2007 )
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